If you have never sat down to plan your estate, the topic can feel like a wall of jargon — trusts, probate, look-back periods, exemptions. This page strips all of that down to plain English. Whether you live in Manhattan, on Long Island, in Westchester, the Hudson Valley, or Upstate, the same New York laws apply, and the same simple ideas can protect the people and property you care about.
At Morgan Legal Group, attorney Russel Morgan, Esq. and our team build plans that do two jobs at once: pass your legacy to the right people smoothly, and protect what you have built from avoidable losses. Below is the honest, jargon-free overview most people wish someone had given them first.
What “Estate Planning” Actually Means
Estate planning is simply deciding — in advance and in writing — who gets what, who is in charge, and who speaks for you if you cannot speak for yourself. In New York, a complete plan rests on four documents working together:
| Document | What it does | New York authority |
|---|---|---|
| Last Will and Testament | Names who inherits and who administers your estate; nominates guardians for minor children | EPTL §3-2.1 |
| Trust(s) | Holds assets for your beneficiaries; can avoid probate and add protection | EPTL Article 7 |
| Durable Power of Attorney | Lets a trusted person manage your finances if you are incapacitated | GOL §5-1513 |
| Health Care Proxy | Lets someone make medical decisions for you | Public Health Law Article 29-C |
Skip any one of these and a gap opens. A will with no power of attorney, for example, does nothing while you are alive but incapacitated — your family may need a court to step in. Learn more on our estate planning overview, or go straight to wills and trusts.
Asset Protection in New York — The Honest Version
Here is where good plain-English guidance matters most, because the internet is full of half-truths. New York does not allow you to hide your own assets from your own creditors using a trust you control. New York does not authorize self-settled domestic asset-protection trusts (often marketed as “DAPTs”). If you can revoke a trust or benefit from it freely, your creditors generally can reach it too. Anyone promising to “creditor-proof” your personal assets in a revocable trust is overselling.
So what actually works in New York? Several legitimate, time-tested tools:
- Irrevocable trusts — including the Medicaid Asset Protection Trust (MAPT). These are irrevocable (you give up control), and Medicaid eligibility carries a 5-year look-back, so timing matters enormously.
- LLCs and business entities — separate business liability from your personal life.
- ERISA-qualified retirement accounts — enjoy strong federal protection.
- Adequate liability insurance — often the first and most cost-effective shield.
- Life insurance — can pass value outside your taxable estate when structured correctly.
- Statutory exemptions under CPLR Article 52, including the homestead exemption (CPLR §5206), which shelters a portion of home equity.
See our asset protection page for how these fit together.
Timing Is Everything
The single most important rule: protect assets before a claim arises, not after. Transfers made to dodge an existing or foreseeable creditor can be unwound by a court as voidable (fraudulent) conveyances under New York’s Debtor & Creditor Law. Asset protection is a fire extinguisher you install before the fire — it cannot put out a blaze that has already started.
The New York Estate Tax — and the “Cliff” You Must Not Fall Off
New York has its own estate tax, separate from the federal one, and it contains a trap that surprises many families.
- 2026 basic exclusion amount: $7,350,000. Estates at or below this generally owe no New York estate tax.
- The cliff: 105% of the exclusion, or $7,717,500. This is the part people miss. If your taxable estate exceeds the cliff, you do not just pay tax on the excess — you lose the ENTIRE exemption and are taxed on the whole estate.
- Rates are progressive, ranging from roughly 3% to 16%.
- New York has no gift tax — but gifts made within 3 years of death are added back into your estate.
That cliff means an estate of $7,717,500 can owe dramatically more tax than one of $7,350,000. Planning the difference — through gifting, trusts, and charitable strategies — is exactly where early advice pays for itself. Our NY estate tax guide walks through the numbers.
Where People New to This Usually Start
If this is all new, here is a sensible order:
- Get the four core documents in place (will, trust, power of attorney, health care proxy). This alone puts you ahead of most New Yorkers.
- Match protection tools to real risks — a homeowner, a business owner, and someone planning for future long-term care each need different shields.
- Check your estate against the tax cliff if your assets approach $7 million.
- Review every few years and after major life events — marriage, children, a new home, a sale, a move into or out of New York.
You do not have to figure out the order alone. Schedule a consultation with Morgan Legal Group and we will map it to your situation.
Frequently Asked Questions
Q: Can I put my house in a revocable trust to keep it safe from creditors or a nursing home?
A: No. Because you keep control of a revocable trust, New York treats those assets as still yours — they are not shielded from your creditors, and they are counted for Medicaid. Protecting a home for long-term care usually means an irrevocable Medicaid Asset Protection Trust, set up at least five years before you need care.
Q: What is the difference between a will and a trust?
A: A will (EPTL §3-2.1) directs who inherits and takes effect through the probate court after death. A trust (EPTL Article 7) holds assets during life and after, can avoid probate, and — when irrevocable — can add protection. Most complete plans use both.
Q: My estate is around $7.5 million. Do I have a problem?
A: Possibly. You are above the 2026 exclusion of $7,350,000 and close to the cliff of $7,717,500. Cross that cliff and you lose the entire exemption, taxing the whole estate. This is precisely the range where planning saves the most.
Q: I already have a creditor or lawsuit. Can you still protect my assets?
A: Honest answer: largely no. Transfers made to defeat an existing or foreseeable claim can be reversed as fraudulent conveyances under New York’s Debtor & Creditor Law. Protection must be in place before trouble appears. We can still help you respond, but the time to build a wall is before the storm.
Q: Does a New York durable power of attorney expire if I become incapacitated?
A: No — that is the point of a durable power of attorney under GOL §5-1513. It is designed to remain valid precisely when you are incapacitated, so your finances can be managed without a court proceeding.
New York’s rules reward people who plan early and honestly. To build a plan that fits your life — and avoids the myths — book a 30-minute consultation with Russel Morgan, Esq. and the Morgan Legal Group team, serving clients across New York State.
This page is general legal information, not legal advice. For statute text, see nysenate.gov, law.justia.com, and tax.ny.gov.
Further reading from Morgan Legal Group: why estate planning is so important.